- Pre-paid interest
Mortgage interest that is paid in
advance of when it is due.
- Pre-paid Items
Items required by lender to be paid at closing prior
to the period they cover such as prorated property taxes, homeowners insurance
and pre-paid interest.
- Pre-qualification
The process of determining how much
money a prospective home buyer might be eligible to borrow before he or she
applies for a loan. When you pre-qualify, we ask you for information about your
credit, assets and debts. Based on the information you provide and the loan
type you want, the lender will calculate how large a loan you could qualify
for.
- Prearranged refinancing agreement
A formal or informal arrangement between a lender and
a borrower where the lender agrees to offer special terms (such as a reduction
in the rate or closing costs) for a future refinancing as an inducement for the
borrower to enter into the original mortgage transaction.
- Preforeclosure Sale
A procedure in which the investor allows a mortgagor
to avoid foreclosure by selling the property, typically for less than the
amount that is owed to the lender.
- Prepayment
Any amount paid to reduce the principal balance of a
loan before the due date. Payment in full on a mortgage that may result from a
sale of the property, the owner's decision to pay off the loan in full, or a
foreclosure. In each case, prepayment means payment occurs before the loan has
been fully amortized.
- Prepayment penalty
A fee that may be charged to a borrower who pays off a
loan before it is due. Generally, a prepayment penalty is added to a loan in
exchange for a discounted rate. The
terms of a prepayment penalty can be found on the note or addendum to the deed
of trust.
- Primary residence
The place someone lives most of the time.
- Prime Loan
- A loan offered to borrowers with better credit history (sometimes
called "A" loans). Prime loans generally are priced lower and cost the
borrower less.
- Prime Rate
The interest rate that banks charge on short-term
loans to its most creditworthy customers. Changes in the prime rate influence
changes in other rates, including mortgage interest rates.
- Principal
The amount borrowed or remaining unpaid. The part of
the monthly payment that reduces the remaining balance of a mortgage.
- Principal Balance
The outstanding balance on a mortgage. The principal
balance does not include interest or any other charges. See remaining balance.
- Principal Payment
Portion of your monthly payment that reduces the
remaining balance of a home loan.
- Principal, interest, taxes, and insurance (PITI)
Four potential components of a monthly mortgage
payment. Principal refers to the part of the monthly payment that reduces the
remaining balance of the mortgage. Interest is the fee charged for borrowing
money. Taxes and insurance refer to the amounts that may be paid into an escrow
account each month for property taxes and mortgage and hazard insurance.
- Private Mortgage Insurance (PMI)
Mortgage insurance that is provided by a private
mortgage insurance company to protect lenders against loss if a borrower
defaults. Most lenders generally require PMI for a loan with a loan-to-value
(LTV) percentage in excess of 80 %.
- Promissory Note
A written promise to repay a specified amount over a
specified period of time.
- Public Auction
A meeting in an announced public location to sell
property to repay a mortgage that is in default.
- PUD (Planned Unit Development)
A project or subdivision that includes common property
that is owned and maintained by a homeowners' association for the benefit and
use of the individual PUD unit owners.
- Purchase Agreement
A written contract signed by the buyer and seller
stating the terms and conditions under which a property will be sold.
- Purchase Money Transaction
A loan used in part as payment for a purchase. A loan
that is used to buy a home is called a purchase money mortgage.
- Purchase Price
The total amount paid for a home.
- Qualification
- The
process of determining whether a customer has enough cash and sufficient income
to meet the qualification requirements set by the lender on a requested loan.
It is sometimes referred to as "pre-qualification" because it is
subject to verification of the information provided by the applicant.
- Qualifying Ratios
Calculations that are used in determining whether a
borrower can qualify for a mortgage. They consist of two separate calculations:
a housing expense as a percent of income ratio and total debt obligations as a
percent of income ratio.
- Quitclaim Deed
A deed that transfers, without
warranty of ownership, whatever interest or title a grantor may have at the
time the conveyance is made.
- Rate Lock
A commitment issued by a lender to a borrower
guaranteeing a specified interest rate for a specified period of time. See
lock-in.
Loan Glossary 
